The Rise of Digital Richmond

Last night I had the privilege of attending a very special event at 99designs, a celebration of sorts with a panel discussion about Melbourne’s thriving startup community and in particular the rise of “digital Richmond”. Once a gritty industrial area, Richmond and Cremorne emerged as the stomping ground of choice for Melbourne’s established tech-companies, aspiring startups, and co-working working spaces.

Giants of Australia’s homegrown tech scene, Seek, REA Group, Carsales.com.au and MYOB, as well as globally minded businesses such as 99designs and Vinomofo, share the precinct’s narrow streets with start-ups, venture capital funds and industry groups such as Startup Victoria, as well as local retailers, small businesses, and iconic music venues. Cafes and restaurants abound. In fact you’re probably more likely to bump into angel investor in a cafe, than in a pitch meeting. 

The event was held at 99designs in the old Australian Knitting Mill (AKM building), an iconic landmark for every Melbournian. The manufacture of hosiery and other knitted items began in 1899 when the first knitting mills were established and by the end of the war period. The Australian Knitting Mill was established in  August of 1899 by Thomas Murray and Co. Right up until the site was taken over in 2006, it continued operating as industrial warehouse, refurbishing coaches and carriage for Melbourne’s transport system. It now houses a bunch of tech companies and startups, notably 99designs, and the Inspire 9 co-working community.

The night was a celebration of 99designs’ return to Australia (new HQ), a celebration of Richmond and its flourishing tech industry, and a discussion about community and the challenges that come with building a successful startup ecosystem. The discussion was opened by Philip Dalidakis, Minister for Small Business, Innovation and Trade. The panel was made of up Rachel Neumann, Startmate Partner and Launch Vic Board Member and former Managing Director of Eventbrite Australia; Dr. Jodie Auster, General Manager of UberEATS; Patrick Llewellyn, CEO of 99designs; Nigel Dalton, REA Group Chief Inventor; Cameron McIntyre, Managing Director and CEO of Carsales; and Eloise Watson, Investment Manager at Rampersand.

Rachel began by introducing everyone and talking about how they met over the years – as co-working individuals at Inspire9, as neighbours in the East Bay, through fellow aspiring entrepreneurs – and how this helped each develop their careers within a well supported environment. I loved this story and it was such a nice surprise to hear that their careers started though a fairly tight grassroots network. It also reminded me that you cannot start new ventures on your own. It was also really nice to see that nearly all had spent time either in Silicon Valley or the East Bay. A nice little reminder of my own fortunate life and past opportunities.

It was really pleased to hear Jodie’s thoughts about Melbourne’s place in the tech industry  In 2016 she moved from San Francisco back to Australia for her partner, leaving her position as head of talent acquisition at Thumbtack. Entrepreneurs rarely talk about life outside of the their product or company at these types of events, so that was really refreshing and led to quite a candid discussion about talent retention. With no position in place upon her return, she worried that Melbourne might not offer the same opportunities. I can’t tell you how pleased I was to hear this and for someone with connections also falling into the trap. It seems this is a common misconception. A week or two ago I started considering moving back to the Bay Area, to search for opportunities not present here. Perhaps my worries were unfounded? 

It turns out that while Melbourne is a hotbed for startups and global tech companies keen to make Melbourne their Asia-Pacific HQ (e.g., Slack, HIRED, 99designs), there is also a severe shortage of talent. As a job hunter with a relatively unique career path, this was music to my ears. 

So perhaps not surprising much of the panel discussion then focussed on talent retention, finding ways to better prepare graduates for careers in the tech industry, finding ways to bring established talent in from other countries to ensure a diverse community, and bringing homegrown talent back to Australia. It was amusing to hear Rachel’s advice, which was to grab talent before their kids start school. Her savvy, somewhat tongue-in-cheek advice was to hunt down people on LinkedIn with kids between 2 and 5 years, and entice them back. Indeed many of the questions following the panel discussion were about retaining talent. 

Richmond has a lot to offer. It’s a major transport hub and a lively, diverse area — a mix of residential and small and big business. Lots of cafes and restaurants, old warehouses and plenty of co-working space, only10 minutes from the CBD, and a few minutes from the M1. However their some challenges. How do you grow an ecosystem that supports growing tech companies, but doesn’t serve to alienate and displace local residents? How do you keep a balance between finding new space without pushing retailers, small businesses and indeed residents out when housing prices inevitably rise? How do you manage fast growth and the need for larger office space? And what are the responsibilities for Local and State government with respect to transport and local services (e.g. childcare facilities for working parents)

More IT grads are coming out of Victoria than any other state, and just like research, many are moving overseas to places like Silicon Valley, New York, and  Singapore. Many believe that the opportunities abroad don’t exist in Australia. Part of the problem is the disconnect between what universities teach and the tech sector. Part of it is also cultural. Universities can sit in bubbles, although this has changed a lot over the past few years.

I couldn’t help but wonder whether part of the problem stems from traditional tech roles, recruiter expectations, and the rise of relatively new roles, or rather labels, such as “data scientists” and “UX research/design”. It seems to me that many companies still don’t really understand what data science is, what data scientists can do, the importance of a having a data science strategy, what backgrounds and skillsets make for good data scientists , etc. In the US and UK the situation is much better, with the Science to Data Science (S2DS) and Insight Data Science Fellows providing much of this advice to companies and preparing transitioning academics for tech careers. A lot of the training and leg work is done. I asked the panel to share their thoughts on this. I also brought up the issue of the lack of internships.

Only Rachel seemed to be aware of these programs and she had a really interesting take on this that I hadn’t considered. Since university education in the US provides students with a boarder skillset — first year undergraduates study a broader range of subjects that include arts, humanities and sciences —  tech recruiters  in Silicon Valley tend to focus on transferable skills (e.g., strategic thinking, critical analysis and communication skills) rather than just discipline specific knowledge. Apparently in Silicon Valley it’s far more common to work in a role that may be completely different to what you trained in at university. It’s also really common to jump from company to company on short timescales (a year or two) and to take up very different roles at each in order to acquire new skill. In Australia we think differently. A software developer is expected to have trained as a software developer and here they are more likely to stay with the same company for many years.

It was great to hear that event bridging courses (e.g., the 12-week courses offered by General Assembly and MOOCs) are good enough that graduates can successfully transition into new careers. Patrick seemed to favour this model. In fact there was a general consensus that if you can attract talent early (even straight out of high-school), you can easily train people on the job. This was somewhat alarming. To me it indicates a growing bias against experience and people transitioning into new careers after 10 or more years in the workforce, in favour of young recruits that can be easily moulded. Not that this is a bad thing. 99designs sees its workforce as the birthplace for the next great business.

The rest of the discussion focussed on the problems associated with raising capital and the reliance on bootstrapping. There was also a discussion about diversity and building an ecosystem that supports young families (the average age at REA is 36), that also supports women returning to the workforce. He also brought up the need for local services (“open East Richmond station for God’s sake!”) and for local government and councils to be able to keep up with changes. Patrick shared an interesting observation. While 99designs faced a lot of red tape setting up in Berlin, the office flourishes because of Berlin’s strong social infrastructure, its open border policy for attracting talent, and the high priority it places on investing in education, which is mostly free. There is no shortage of design talent in Berlin.